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The British pound and the euro rose strongly against the US dollar amid reports on Brexit, but the upside potential will still be limited to the meetings of central banks, which will begin tomorrow and the results of which will be known on September 13. It is expected that the Bank of England will leave its monetary policy unchanged, while the European Central Bank will signal the further curtailment of the asset repurchase program, which will support the euro.
The pound strengthened more than 100 points from the opening level of Monday after the Brexit negotiator from the EU Michel Barnier stated that the agreement between the EU and the UK is already ready by 90%. The territorial problem with Ireland is also at the final stage of the decision. Barnier expects that Brexit agreement will be possible within six to eight weeks.
According to Ft, the EU is ready to make a number of concessions and grant Barnier the mandate in an effort to reach an agreement with Britain in the near future. A number of experts have repeatedly noted that if the Brexit issue is not resolved, then the drop in the pound will be approximately 8%. At the same time, if the positive result is achieved, the British pound will grow by more than 6%. Which side to take, you decide.
Data released on the US economy in the afternoon on Monday, September 10, did not support the US dollar, although they were positive.
According to the Conference Board report, the employment trends in the US in August this year showed growth. So, the index of employment trends rose to 110.88 points from 109.58 points in July. Compared to the same period in 2017, the index rose by 6.9%. As noted in the Conference Board, the current data allow you to make a forecast of strong economic growth next year, which will keep the demand for labor at a fairly high level.
Consumer lending in the US in July rose, which will certainly support the pace of economic growth in the 3rd and 4th quarter of this year.
According to the report of the Federal Reserve System, unsecured consumer lending in July 2018 increased by 5.12% as compared to June of the previous year. In monetary terms, the increase was 16.64 billion US dollars compared with the previous month. Economists predicted a 15 billion dollar increase in lending in July.
Credit cards, so-called revolving loans, increased by 1.45% over the reporting period compared to the same period of the previous year. Non-renewable loans, which include student loans and auto loans, showed an annual growth of 6.44%.
As for the technical picture of the EUR / USD currency pair, the whole emphasis is now shifted to a return to resistance level 1.1650, from which the Friday's fall was formed. Despite the good upside potential in risky assets, it is likely that the demand for the euro will gradually slow down as the pair approaches the above resistance, as its break breaks the downtrend and will lead to a new wave of growth in the trading instrument. However, this requires support in the form of statements to be made by the European Central Bank by the end of this week.
The Australian dollar completely ignored the weak series of fundamental data that came out today.
However, it is worth noting that the AUD / USD currency pair is still holding about critical support levels, which may lead to the formation of an upward correction.
According to ANZ and Roy Morgan, the consumer confidence index in Australia fell by 1.3% last week after rising over the previous two weeks.
Despite this, the index of conditions for doing business in Australia in August 2018 increased by 2 points, to 15 points.
The indicator of business confidence dropped 3 points, to 4, below its average level.
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